This case study discusses the 2015 accounting scandal at Toshiba Corporation where an independent investigation found the company had inflated earnings by over $1.2 billion from 2009-2014. While Toshiba had adopted corporate governance reforms, the culture of setting unachievable targets and performance-based compensation created pressure to manage earnings. The internal audit function at Toshiba focused on consultation rather than accounting audits, failing to catch the inflated earnings. For internal audit to be truly independent, the audit committee must be capable, independent, and have the internal auditor report directly to it. However, in Toshiba's case the audit committee lacked financial expertise and independence.
An exercise whose objective is to enable auditors to express an opinion on whether the financial statements give a true and fair view (or equivalent) of the entity’s affairs at the period end and of its profit or loss (or income and expenditure) for the period then ended and have been properly prepared in
accordance with the applicable reporting framework (e.g. relevant legislation and applicable accounting standards) or where statutory or other specific requirements prescribe the term, whether the financial statements “present fairly”.
An exercise whose objective is to enable auditors to express an opinion on whether the financial statements give a true and fair view (or equivalent) of the entity’s affairs at the period end and of its profit or loss (or income and expenditure) for the period then ended and have been properly prepared in
accordance with the applicable reporting framework (e.g. relevant legislation and applicable accounting standards) or where statutory or other specific requirements prescribe the term, whether the financial statements “present fairly”.
An internal audit is designed to review what a company is doing in order to identify potential threats to the organization's financial health and profitability and to make suggestions for mitigating the risk associated with those threats.
An internal audit is designed to review what a company is doing in order to identify potential threats to the organization's financial health and profitability and to make suggestions for mitigating the risk associated with those threats.
Auditing is the process of verifying the validity of a company's various financial statements. Many renowned experts have defined auditing from their own perspectives. Below are the thoughts of some of the authors who commented on their respective opinions.
AUDITOR, ROLE OF AN AUDITOR, KINDS OF AUDITOR, INTERNAL AUDITORS, GOVERNMENT AUDIOTRS, INDEPENDENT AUDITORS, IMPORTANCE OF AUDITOR & PROBLEM FACED BY AN AUDITOR.
ELEMENTS OF AUDITING
AUDIT AND INVESTIGATION
Definition
AUDIT
- Is the formal examination, correction, and official endorsing of financial account, especially those of a business undertaken annually by an accountant
- Inspection and verification of the accuracy of financial records and statements. Also involves systematic check or assessment especially efficient or effectiveness of an organization
AUDITING
- Is the examination of certain statement covering the transaction over certain period and financial position of an organization
- Is the examination financial statement covering over a period and ascertaining the financial position of organization on a certain date
AUDITOR
Is the an independent person appointed by company or an enterprise to examine its books of account
QUALITIES OF AN AUDITOR
I. Accounting knowledge.
An auditor should necessary have an academic qualification in accounting. This enable him to make evaluation and passing judgment of the financial records
II. Business knowledge.
Checklist for auditing non profit organizationsAhmedTalaat127
An annual audit is one of the essential obligations of profit organizations. They are required to demonstrate to the authorities their operational transparency and pay the appropriate amount of tax. Non-profit organizations, on the other hand, have an advantage in this situation because they are eligible for a variety of tax deductions. The primary reason for this is that they are not interested in pocket earnings but rather in utilizing them to benefit underprivileged segments of society.
Aside from this, non-profit organizations are required to undertake an annual audit of their financial records. This is because donors provide them with far more financial support than they need to carry out their purpose. They have the same right as everyone else to inquire and investigate whether or not their finances and assistance are being used honestly. As a result, an audit can also draw attention to the transparency of organizations, which is incredibly significant.
Because of taxes considerations, the audit of a non-profit organization differs from a profit-based organization in some ways. As a result, if you are in charge of or manage a non-profit organization, you must pay close attention to the minor details to ensure a smooth audit procedure. To reach this purpose, it is simple to follow a checklist of audit procedures.
We’ve prepared a non-profit organization audit checklist in this post that you can use to guarantee that the procedure is carried out appropriately. When performing an audit of a non-profit organization, the following points should be kept in mind.
What website can I sell pi coins securely.DOT TECH
Currently there are no website or exchange that allow buying or selling of pi coins..
But you can still easily sell pi coins, by reselling it to exchanges/crypto whales interested in holding thousands of pi coins before the mainnet launch.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and resell to these crypto whales and holders of pi..
This is because pi network is not doing any pre-sale. The only way exchanges can get pi is by buying from miners and pi merchants stands in between the miners and the exchanges.
How can I sell my pi coins?
Selling pi coins is really easy, but first you need to migrate to mainnet wallet before you can do that. I will leave the telegram contact of my personal pi merchant to trade with.
Tele-gram.
@Pi_vendor_247
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how to swap pi coins to foreign currency withdrawable.DOT TECH
As of my last update, Pi is still in the testing phase and is not tradable on any exchanges.
However, Pi Network has announced plans to launch its Testnet and Mainnet in the future, which may include listing Pi on exchanges.
The current method for selling pi coins involves exchanging them with a pi vendor who purchases pi coins for investment reasons.
If you want to sell your pi coins, reach out to a pi vendor and sell them to anyone looking to sell pi coins from any country around the globe.
Below is the contact information for my personal pi vendor.
Telegram: @Pi_vendor_247
Turin Startup Ecosystem 2024 - Ricerca sulle Startup e il Sistema dell'Innov...Quotidiano Piemontese
Turin Startup Ecosystem 2024
Una ricerca de il Club degli Investitori, in collaborazione con ToTeM Torino Tech Map e con il supporto della ESCP Business School e di Growth Capital
Empowering the Unbanked: The Vital Role of NBFCs in Promoting Financial Inclu...Vighnesh Shashtri
In India, financial inclusion remains a critical challenge, with a significant portion of the population still unbanked. Non-Banking Financial Companies (NBFCs) have emerged as key players in bridging this gap by providing financial services to those often overlooked by traditional banking institutions. This article delves into how NBFCs are fostering financial inclusion and empowering the unbanked.
how can i use my minded pi coins I need some funds.DOT TECH
If you are interested in selling your pi coins, i have a verified pi merchant, who buys pi coins and resell them to exchanges looking forward to hold till mainnet launch.
Because the core team has announced that pi network will not be doing any pre-sale. The only way exchanges like huobi, bitmart and hotbit can get pi is by buying from miners.
Now a merchant stands in between these exchanges and the miners. As a link to make transactions smooth. Because right now in the enclosed mainnet you can't sell pi coins your self. You need the help of a merchant,
i will leave the telegram contact of my personal pi merchant below. 👇 I and my friends has traded more than 3000pi coins with him successfully.
@Pi_vendor_247
Resume
• Real GDP growth slowed down due to problems with access to electricity caused by the destruction of manoeuvrable electricity generation by Russian drones and missiles.
• Exports and imports continued growing due to better logistics through the Ukrainian sea corridor and road. Polish farmers and drivers stopped blocking borders at the end of April.
• In April, both the Tax and Customs Services over-executed the revenue plan. Moreover, the NBU transferred twice the planned profit to the budget.
• The European side approved the Ukraine Plan, which the government adopted to determine indicators for the Ukraine Facility. That approval will allow Ukraine to receive a EUR 1.9 bn loan from the EU in May. At the same time, the EU provided Ukraine with a EUR 1.5 bn loan in April, as the government fulfilled five indicators under the Ukraine Plan.
• The USA has finally approved an aid package for Ukraine, which includes USD 7.8 bn of budget support; however, the conditions and timing of the assistance are still unknown.
• As in March, annual consumer inflation amounted to 3.2% yoy in April.
• At the April monetary policy meeting, the NBU again reduced the key policy rate from 14.5% to 13.5% per annum.
• Over the past four weeks, the hryvnia exchange rate has stabilized in the UAH 39-40 per USD range.
Poonawalla Fincorp and IndusInd Bank Introduce New Co-Branded Credit Cardnickysharmasucks
The unveiling of the IndusInd Bank Poonawalla Fincorp eLITE RuPay Platinum Credit Card marks a notable milestone in the Indian financial landscape, showcasing a successful partnership between two leading institutions, Poonawalla Fincorp and IndusInd Bank. This co-branded credit card not only offers users a plethora of benefits but also reflects a commitment to innovation and adaptation. With a focus on providing value-driven and customer-centric solutions, this launch represents more than just a new product—it signifies a step towards redefining the banking experience for millions. Promising convenience, rewards, and a touch of luxury in everyday financial transactions, this collaboration aims to cater to the evolving needs of customers and set new standards in the industry.
US Economic Outlook - Being Decided - M Capital Group August 2021.pdfpchutichetpong
The U.S. economy is continuing its impressive recovery from the COVID-19 pandemic and not slowing down despite re-occurring bumps. The U.S. savings rate reached its highest ever recorded level at 34% in April 2020 and Americans seem ready to spend. The sectors that had been hurt the most by the pandemic specifically reduced consumer spending, like retail, leisure, hospitality, and travel, are now experiencing massive growth in revenue and job openings.
Could this growth lead to a “Roaring Twenties”? As quickly as the U.S. economy contracted, experiencing a 9.1% drop in economic output relative to the business cycle in Q2 2020, the largest in recorded history, it has rebounded beyond expectations. This surprising growth seems to be fueled by the U.S. government’s aggressive fiscal and monetary policies, and an increase in consumer spending as mobility restrictions are lifted. Unemployment rates between June 2020 and June 2021 decreased by 5.2%, while the demand for labor is increasing, coupled with increasing wages to incentivize Americans to rejoin the labor force. Schools and businesses are expected to fully reopen soon. In parallel, vaccination rates across the country and the world continue to rise, with full vaccination rates of 50% and 14.8% respectively.
However, it is not completely smooth sailing from here. According to M Capital Group, the main risks that threaten the continued growth of the U.S. economy are inflation, unsettled trade relations, and another wave of Covid-19 mutations that could shut down the world again. Have we learned from the past year of COVID-19 and adapted our economy accordingly?
“In order for the U.S. economy to continue growing, whether there is another wave or not, the U.S. needs to focus on diversifying supply chains, supporting business investment, and maintaining consumer spending,” says Grace Feeley, a research analyst at M Capital Group.
While the economic indicators are positive, the risks are coming closer to manifesting and threatening such growth. The new variants spreading throughout the world, Delta, Lambda, and Gamma, are vaccine-resistant and muddy the predictions made about the economy and health of the country. These variants bring back the feeling of uncertainty that has wreaked havoc not only on the stock market but the mindset of people around the world. MCG provides unique insight on how to mitigate these risks to possibly ensure a bright economic future.
The European Unemployment Puzzle: implications from population agingGRAPE
We study the link between the evolving age structure of the working population and unemployment. We build a large new Keynesian OLG model with a realistic age structure, labor market frictions, sticky prices, and aggregate shocks. Once calibrated to the European economy, we quantify the extent to which demographic changes over the last three decades have contributed to the decline of the unemployment rate. Our findings yield important implications for the future evolution of unemployment given the anticipated further aging of the working population in Europe. We also quantify the implications for optimal monetary policy: lowering inflation volatility becomes less costly in terms of GDP and unemployment volatility, which hints that optimal monetary policy may be more hawkish in an aging society. Finally, our results also propose a partial reversal of the European-US unemployment puzzle due to the fact that the share of young workers is expected to remain robust in the US.
how can I sell pi coins after successfully completing KYCDOT TECH
Pi coins is not launched yet in any exchange 💱 this means it's not swappable, the current pi displaying on coin market cap is the iou version of pi. And you can learn all about that on my previous post.
RIGHT NOW THE ONLY WAY you can sell pi coins is through verified pi merchants. A pi merchant is someone who buys pi coins and resell them to exchanges and crypto whales. Looking forward to hold massive quantities of pi coins before the mainnet launch.
This is because pi network is not doing any pre-sale or ico offerings, the only way to get my coins is from buying from miners. So a merchant facilitates the transactions between the miners and these exchanges holding pi.
I and my friends has sold more than 6000 pi coins successfully with this method. I will be happy to share the contact of my personal pi merchant. The one i trade with, if you have your own merchant you can trade with them. For those who are new.
Message: @Pi_vendor_247 on telegram.
I wouldn't advise you selling all percentage of the pi coins. Leave at least a before so its a win win during open mainnet. Have a nice day pioneers ♥️
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how to sell pi coins on Bitmart crypto exchangeDOT TECH
Yes. Pi network coins can be exchanged but not on bitmart exchange. Because pi network is still in the enclosed mainnet. The only way pioneers are able to trade pi coins is by reselling the pi coins to pi verified merchants.
A verified merchant is someone who buys pi network coins and resell it to exchanges looking forward to hold till mainnet launch.
I will leave the telegram contact of my personal pi merchant to trade with.
@Pi_vendor_247
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2. History of Audit
• Phase -1 (1840-1920)
• Phase-2 (1920-1960)
• Phase-3(1960-1990)
• Phase-4(1990 till date)
3. History of Auditing in India
• Companies Act 1913
• 1932 constitution of Accounting Board
• Charted Accountants Act 1949
• Companies Act 1956
• Manufacturing and other companies order
1975
• Companies Act 2013
4. Definition of Auditing
• According to ICAI
• “Auditing is defined as a systematic and
independent examination of data, statements,
records, operations and performances of an
enterprise for a stated purpose. In any auditing
situation the auditor perceives and recognises the
propositions before him for examination, collects
evidence, evaluate the same on this basis
formulates his judgement which is communicated
through his audit report.”
5. Objective of Auditing
• Primary Objective(expression of opinion)
• Secondary Objective(Detection of errors and
frauds)
6. Types of Errors
• Error of Principle
• Error of Omission
• Error of Commission
• Compensating Error
8. Principles governing An Audit
• Integrity
• Confidentiality
• Skill and Competence
• Work performed by others
• Documentation
• Planning
• Audit evidence
• Accounting System and internal control
• Planning
• Audit conclusions and Reporting
9. Advantages of Audit
• Authenticity of Accounts
• Detection of errors and frauds
• Identification of loopholes
• Acceptable to taxation authorities
• Increased creditworthiness
• Settlement of dispute among partners
• Settlement of insurance claims
• Helpful in making comparisons
• Accounts department becomes vigilant
10. Limitations
• Time consuming
• Frauds not detected
• Costly
• Depends on judgement
• All frauds can not be detected
• Dependence on others
11. Qualities of an Auditor
• Integrity
• Objectivity
• Independence
• Confidentiality
• Skills
• Responsible
• Intelligent
• Vigilant
• Communication skills
12. An Auditor is a watchdog and not a blood hound
•In the case of a limited company, an auditor is appointed
by the company’s shareholders. He is expected to work on
their behalf in the role of a watchdog and should look
after their best interests.
•Unlike a bloodhound, the auditor’s main duty is towards
verification of the client’s books rather than detection.
During the course of his audit, if he finds something
suspicious, he should extend his audit procedures to
examine the matter in detail and should communicate the
same to the shareholders. However, in the absence of any
such suspicious circumstances, he is completely justified
in relying upon the representations made by the client’s
staff and management. When it comes to fraud and error,
he has to exercise reasonable care only.
13. Features of an Auditor
• An agent: The auditor is an agent of the
company’s members assigned to execute
tasks outlined in (a) the Companies Act,
(b) the company’s Articles of Association,
and (c) the audit engagement between the
auditor and the client.
• Not an advisor: An auditor is not a
company advisor. It is not his responsibility
to advise the board of directors or the
shareholders.
14. Different types of audits
• Internal Audits. Internal audits assess internal
controls, processes, legal compliance, and
the protection of assets. ...
• External Audits. ...
• Financial Statement Audits. ...
• Performance Audits. ...
• Operational Audits. ...
• Employee Benefit Plan Audits. ...
• Single Audits. ...
• Compliance Audits.
15. Difference Between Accounting and Auditing
Accounting Auditing
Definition
Accounting is referred to as the process of
recording, classifying, summarising and
interpreting the financial transactions,
statements to determine the financial
position of an organisation
Auditing is referred to as the process of
examining the financial records such as
transactions and statements of an
organisation in order to find any
discrepancies during the process of recording
of the transactions and also to verify the
accuracy of the records
Purpose
Accounting is done with the purpose of
showing the position, profitability and
performance of the business entity or
organisation
Auditing is done to verify the accuracy of
data presented by accounting. It is done with
the purpose of revealing to what extent the
true and fair view of records is maintained in
the transactions
Objective
To determine profit and loss of the
organisation or the financial position of an
organisation for a period
To determine the correctness of all the
recorded transactions
Mode of operation
Accounting is done on a daily basis, as
transactions happen on a daily basis for any
business
It is a periodical assessment and is done
monthly, quarterly or yearly
Performed by
Accounting is done by accountants Auditing is done by auditors
Sequence
Accounting starts at the end of bookkeeping Auditing starts at the end of accounting
16. Types of Audit 1/3
Internal Audit
• Internal audits are performed by the employees of a company or
organization. These audits are not distributed outside the company. Instead,
they are prepared for the use of management and other internal
stakeholders.
• Internal audits are used to improve decision-making within a company by
providing managers with actionable items to improve internal controls. They
also ensure compliance with laws and regulations and maintain timely, fair,
and accurate financial reporting.
• Management teams can also utilize internal audits to identify flaws or
inefficiencies within the company before allowing external auditors to review
the financial statements.
17. Types of Audit 2/3
• Performed by external organizations and third parties, external audits
provide an unbiased opinion that internal auditors might not be able to give.
External financial audits are utilized to determine any material
misstatements or errors in a company’s financial statements.
• External audits are important for allowing various stakeholders to
confidently make decisions surrounding the company being audited.
• The key difference between an external auditor and an internal auditor is
that an external auditor is independent. It means that they are able to
provide a more unbiased opinion rather than an internal auditor, whose
independence may be compromised due to the employer-employee
relationship.
18. Types of Audit 3/3
• Government audits are performed to ensure that financial statements have
been prepared accurately to not misrepresent the amount of taxable income
of a company.
• Within the U.S., the Internal Revenue Services (IRS) performs audits that
verify the accuracy of a taxpayer’s tax returns and transactions. The IRS’s
Canadian counterpart is known as the Canada Revenue Agency (CRA).
• Audit selections are made to ensure that companies are not
misrepresenting their taxable income. Misstating taxable income, whether
intentional or not, is considered tax fraud. The IRS and CRA now use
statistical formulas and machine learning to find taxpayers at high risk of
committing tax fraud.
19. Case Study - 1
Toshiba, a 140-year-old pillar of Japan Inc, is caught up in the country's biggest accounting scandal since 2011.
In 2011, Olympus Corp was embroiled in a scandal. In July 2015, Toshiba Corp president Hisao Tanaka and his
two predecessors quit after investigators found that the company inflated earnings by at least $1.2 billion
during the period 2009-2014. Toshiba is one of the early adopters of the corporate governance reforms
initiated in Japan. The corporate governance structure met corporate governance standards. Time and again
cases of corporate governance failures have provided evidence that good corporate governance structure does
not necessarily lead to good corporate governance. Organisation culture is a critical determinant of the quality
of corporate governance.
Some of the observations of the independent investigation committee of the company on internal audit
demand discussion and debate.
The investigation committee observes, "According to the division of duties rules of Toshiba, the corporate audit
division is in charge of auditing the corporate divisions, the companies, branch companies, and affiliated
companies. However, in reality the corporate audit division mainly provided consultation services for the
'management' being carried out at each of the companies, etc (as part of the business operations audit), and it
rarely conducted any services from the perspective of an accounting audit into whether or not an accounting
treatment was appropriate.“
The observations of the committee give the impression that the fault of the internal audit in Toshiba was that it
focused on consultation service rather than assurance service. Should internal audit avoid providing
consultation service? I do not think so. It was not the fault of the internal audit that it provided consultation
service. The fault was that it did not pay attention to accounting audit.
In Toshiba, the top management used to set targets that are unachievable. There was excessive pressure from
the top management to achieve those targets.
20. Case Study – 1 (Cont1)
The variable pay is a significant portion of the total pay. The compensation of executive officers comprises a
base compensation based on title and a role compensation based on work content. Forty per cent to 45 per
cent of the role compensation is based on performance of the overall company or business department.
'Challenge' to achieve unachievable targets and performance-based pay provide enough motivation to manage
earnings. Therefore, accounting audit should have been a focus area for internal audit.
Internal audit can function independently only if the audit committee is capable, independent and effective,
and the internal auditor reports to the audit committee.
In Toshiba, the audit committee was neither capable nor independent. The three external members of the
audit committee had no knowledge of finance and accounting. An ex-Chief Financial Officer (CFO), who was the
CFO during the timeframe when accounting irregularities occurred, was the only whole time member of the
audit committee. Therefore, the internal audit was not independent of the management. Earnings
management had the tacit approval of the top management. Therefore, it is not surprising that accounting
audit was excluded from the scope of internal audit. It is incorrect to infer that the accounting audit did not
receive the attention of the internal audit because its focus was on providing consultation service.
21. Case Study – 1 (Cont2)
Contemporary literature defines internal audit as 'assurance and consulting service'. The issue is of
balancing between consultation service and assurance service. Problem arises when the internal auditor
forgets that the internal audit is primarily an assurance function. The consultation service flows from
the assurance service. Although, the primary objective of operation audit is to obtain assurance that the
internal control that is installed to achieve operation objectives is adequate and operating effectively,
the auditees look to the internal auditor for suggestions and consultancy. Such consultation service is a
by-product of the assurance service. Auditees should not be denied the benefits of internal auditor's
understanding of the industry and the business, and the challenges before the auditees in achieving
operation objectives. Exclusion of consultation service from the scope of internal audit would result in
sub-optimal utilisation of internal audit resources.
Organisation culture also determines the effectiveness of internal audit. The investigation committee
observes, "A corporate culture existed at Toshiba whereby employees could not act contrary to the
intent of their superiors". In such a culture an upright internal auditor cannot survive, particularly if he
is not independent of the management. Perhaps, it is the reason that the internal audit in Toshiba had
chosen the easy path of focusing on 'consultation service' only without reporting internal control
weaknesses.
Internal auditor is the 'eyes and ears' and 'go-to man' of the audit committee. Therefore, internal audit
failure leads to corporate governance failure.
22. Audit Case Study - 2
• Fraud is a practice that can make businesses to undergo some massive losses. It is
noteworthy that a small company like XYZ has a small operating capital that could
diminish drastically if not well managed. Fraud cases such as skimmed payments
from customers, cash theft, improper handling of petty cash and misuse of the
company’s credit cards are some of the practices that can lead to total failure of a
company.
• It is quite expensive for a small business like XYZ Ltd to create an internal audit
department, however, the company can create a system that checks and controls the
financial operations and the company employees. An informal internal audit process
would somewhat reduce fraud cases resulting from personal interests (Chi & Huang
2011). It is noteworthy that the parent company would have split due to extreme
cases of fraud.
• Prevention of fraud through an informal audit exercise would enable the small XYZ
Company to prosper and grow into a big multinational company and even surpass the
projected turnover of £2.8 million in the first year of trading.
• It is important for the company to create a program that would help in monitoring
employees and enforce strict rules regarding any employee who is found guilty of
committing fraud cases. The establishment of an internal audit would facilitate the
above-mentioned practices though a persistent analysis of the company’s operations.
23. Audit Case Study -2 (Cont1)
Testing and monitoring of internal controls
• An Informal internal audit calls for recurrent analysis of
the operations within a company. The habitual analysis
enables the company’s operations to occur smoothly,
where, the employees are kept on toes to offer the
best of services. A small company like XYZ Ltd can
employ auditors who would design, modify, and control
the internal activities of the company.
• Though auditing, the company is able to streamline its
activities in a manner that would enable it to achieve
its goals and objectives (Holm & Zaman 2012).
Essentially, XYZ Ltd is a profit making company that
would aim at generating the maximum profits possible.